To think that universal credit wrongly penalises...

[User78890]

Posted a while ago about universal credit and savings... I can't get my head around it.

The rules are that above 6k you get deductions to your claim. The more you save, the more that gets deducted. 16k or above means that you cannot claim.

I am (hopefully) going to be training for a profession for a few years which will be a low wage. I'll have to rely on universal credit as my wage wouldn't cover childcare costs on top of everything else. But where does this leave those who want to save for a mortgage?

Surely anyone who saves will be in a constant cycle as you will then need to use your savings to live on, claim again, and repeat.

Before anyone jumps on me, I know benefits are for those who need it, and if you have savings, yes, you are obviously not in the priority of those who need it. But, those who spunk their money or use it wrongly are unaffected. Those who are trying to better their situation and are sensible, however, are in a constant trap. We are both equally entitled to the same financial help, but one is penalised and the other isn't.

So surely you would be best of spending your money, and you will never get a mortgage (unless obviously you was to secure a higher paid job)...

However, the point not being recognise is that if op remains renting, she'll probably remain eligble for uc and the housing allowance for forever more and those payments over a lifetime would far exceed if she had been able to say use 15k as savings for her own house. Where she maybe eligible for uc, but not the housing element is a mortgagee. Short-term the government would lose out if say op had to put the money into a housing savings account as the gov has in place, but long term it means not potentially 50 or more years of paying housing allowance...

Do people take into the account that saving for deposit isn't all that's needed to buy? If someone is on such a low wage, they need UC, do you really reckon they would get mortgage unless they live in area where houses cost 60k?

Oh lord! You’re annoyed that UC don’t allow you to save for a mortgage???

UC is there as a ‘make sure kids don’t starve or end up on the streets’ not so you can squirrel away a mortgage deposit whilst living on the tax payers money

If someone has savings, the government cannot know whether or not the person will use that to buy a house, unless they put in place regulations around savings specifically for house buying.

At some point the OP’s children will grow up and she would have to work full time under UC regulations. At that point between her and her DH there shouldn’t be a housing component because they would earn enough on 2 full time jobs.

The alternative is that a couple working full time in minimum wage jobs who don’t qualify for universal credit because they work full time supplement the OP so she can buy a house.

I agree with the previous poster who said local authorities/ the government should own social housing stock so that they effectively pay the housing component of benefits back to themselves.

It is the unfair housing situation that causes these problems.

Can't decide on this one. On the one hand it is unreasonable to expect the taxpayer to support you when you have plenty of savings. But presumably if you already own a house you wouldn't be expected to release any equity to support yourself? Even though technically you have the same net worth as someone who still as the cash as they haven't bought a property yet.

There ought to be some way of ring fencing money saved to buy a home so it's not treated the same as holiday or car savings. Perhaps by not allowing it to be withdrawn for anything else without having to repay the UC.

@SchrodingersImmigrant I get working tax credits and I got a mortgage. House cost £100k and I had a 40% deposit.

I'm retraining for a profession with a starting salary above 25k... there are lots out there!

[quote Waxonwaxoff0]@SchrodingersImmigrant I get working tax credits and I got a mortgage. House cost £100k and I had a 40% deposit.[/quote]
Well 40% is very respectable deposit.
Tbh i have no idea what tax credit limit is.

There is no limit for tax credits. It's just a limit on income (so if your savings provide income over £300 that is taken into account)

Tax credits are still going strong. It'll be years til they are fully phased out.

There are genuine poor in this country and they rely on UC.
You want UC to help you save for a mortgage. I find that disgraceful and entitled.
When I got divorced I worked full time and got a mortgage on my salary alone. As a tax payer I really do not want to help fund your mortgage.
I

I do agree there should be a cap. But, surely to allow those who have been working to at least get one property (at a reasonable cost) before they then get penalised. There's a difference between being on a low wage and saving like mad, to inheriting 200k when you may already have a property.

Where have you been the last few years? or is it a case of "oh shit now it affects me it's unfair"?
Don't you think that people who are stuck, for whatever reason, in shit badly paid jobs don't want to save for a house too?

Withdraw the money and put it in someone else’s account to save instead. Then they can gift it to you.

@Potterpotterpotter

Withdraw the money and put it in someone else’s account to save instead. Then they can gift it to you.

Great advice until they may need to claim benefits themselves but find they have too much money in their bank account.

@Babyroobs which is why you pick someone you trust that doesn’t need to claim benefits.

Not everyone claims benefits or needs to claim benefits.

@Potterpotterpotter

Withdraw the money and put it in someone else’s account to save instead. Then they can gift it to you.

This is benefit fraud. Don't do this.

[quote Potterpotterpotter]@Babyroobs which is why you pick someone you trust that doesn’t need to claim benefits.

Not everyone claims benefits or needs to claim benefits.[/quote]
Yes but as everyone knows , situations can change.

@CrazyToast

It's because UC isn't meant to support the betterment of a lifestyle. It's survival money when you can't afford to live.

... Yes, benefits (for the NT able-bodied) are supposed to give a baseline minimum to maintain a basic lifestyle,

They were not intended to boost people up to a property-owning mc lifestyle
The latter may be a good aim if you are poor, but then benefits are not the way to that

Benefit fraud is a great way to get a criminal conviction and ruin your life

It’s deliberately designed (by people who knew they would never have to live on it) to be uncomfortable to live on UC because those that designed it think poor people just need the right incentive to stop being poor. That if its unpleasant you’ll get off your lazy arse and make your own money. Rather than the reality that a great many on it simply can’t earn more than they are and will always be reliant on state top ups for all sorts of valid reasons.

This is benefit fraud. Don't do this

No different to withdrawing the money and spending it on a night out.

Except it’s being saved. You can do what you want with your money.

Yes but as everyone knows , situations can change.

Some people have stable highly paid jobs. Where the chances of them losing it and going on UC is extremely low.

@Potterpotterpotter

This is benefit fraud. Don't do this

No different to withdrawing the money and spending it on a night out.

Except it’s being saved. You can do what you want with your money.

There are so many problems with this. You put it in your grandma's savings account, what happens if she has to go into care and they think she has more money than she does ? You put it in your dads bank account but he loses his job and needs to claim UC himself but can't as he has 20k of your savings in there ? very problematic unless you can find someone who is very loaded and you know will never need to claim benefits themselves !!

@Potterpotterpotter

Yes but as everyone knows , situations can change.

Some people have stable highly paid jobs. Where the chances of them losing it and going on UC is extremely low.

Ok well not everyone knows someone like that who they can ask to help them commit benefit fraud. I certainly wouldn't feel comfortable asking someone to do it.

But you pretty much answered your own question in your original post. Benefits aren't meant to be long term, and they're there to help the people who need them a short term stop gap, unless the recipient is physically/mentally unable to work long term and in which case as a society we fincially support that (a very good thing!). But the bottom line is its not a limitless pot and whilst many are more than happy to cover care/support/daily living costs of individuals who are unable to work due to disability, mental health, vulnerability, young childcare or advanced adult age. It's not really there to support those who are capable of work (yes, a very broad spectrum!). And whilst it probably does feel really unfair that X pisses 'extra money' up the wall whilst Y saves like made for a mortgage. What's the cut off point? What's the criteria? Should the government ask X and Y to produce bank outgoings every month to decide that X is buying wine whilst Y is living off baked beans and saving? Maybe look into rent to buy/right to buy schemes that offer flexibility around deposits for 1st time buyers?

I really think money specifically saved in some kind of help to buy ISA ( if they still exist ??) should be ringfenced. Imagine if you've been saving up your house deposit for years then lose your job. You would honestly be gutted.